Japan's House of Representatives approved a sweeping crypto reform bill on June 11, 2026, reclassifying digital assets as financial instruments under the Financial Instruments and Exchange Act (FIEA). The legislation, which now moves to the upper house, mirrors the regulatory framework for stocks and bonds, marking a significant shift from the Payment Services Act that previously governed cryptocurrencies.
The bill introduces insider-trading bans, mandatory disclosure requirements for crypto projects, and opens the door to crypto exchange-traded funds (ETFs). According to the Financial Services Agency, Japan currently has over 14 million registered crypto accounts, with 70% held by individuals earning less than ¥7 million ($43,600) annually. The reforms are set to take effect in 2027, but the most impactful change for investors—a reduced tax rate on crypto gains—will begin in 2028. The current maximum rate of up to 55% will drop to a flat 20%, aligning crypto taxation with that of securities.
Japan Exchange Group, which operates the Tokyo Stock Exchange, expects crypto-linked ETFs to start listing as early as next year, signaling institutional readiness. Among the assets likely to benefit first is XRP, which already has deep integration into Japanese banking infrastructure through SBI-linked pilot programs. With regulatory clarity and lower taxes, XRP is structurally positioned to attract institutional capital ahead of many other tokens.
The bill's passage comes as global regulators grapple with crypto classification. Japan's move could serve as a blueprint for other nations, potentially accelerating institutional participation worldwide.
